Is Fed Policy Still Too Tight?
- After two rounds of rate cuts that have trimmed the Fed funds target rate by 75 basis points to the current 4.50%-to-4.75% range, policy still appears to be moderately tight as of October 2024.
- The dilemma for the Fed is that the latest consumer inflation data suggest pricing pressure has turned sticky and so it's premature to cut rates again.
- Several nowcasts for US economic growth in the fourth quarter point to an ongoing if gradual slowdown.
Richard Drury
The next round of central bank decisions could rank among the most challenging in recent history, perhaps in decades. Policy hawks and doves can cite a fair amount of evidence for supporting their respective views. The deciding factor, as usual, will be
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